The new issue of the IMF’s Finance & Development magazine explores how Asia is moving into a leadership role in the world economy.Anoop Singh, Director of the IMF’s Asia and Pacific Department, says that, based on expected trends, within five years Asia’s economy will be about 50 percent larger than it is today and be comparable in size to the economies of the United States and Europe.

The issue looks at Asia’s biggest economy, China, which has relied heavily on exports to grow, and its need to increase domestic demand and to promote global integration if it is to continue to thrive. China is not the only Asian economy that heavily depends on exports and all of them might take some cues from the region’s second-biggest economy, India, which has a highly developed services sector.

The magazine also covers how best to reform central banking in the aftermath of the global economic crisis; the pernicious effects of derivatives trading on municipal government finances in Europe and the United States; and some ominous news for governments hoping to rely on better times to help them reduce their debt burdens.

Mohamed El-Erian argues that sovereign wealth funds are well-placed to navigate the new global economy that will emerge following the world wide recession. “Back to Basics” explains supply and demand. “Data Spotlight” explores the continuing weakness in bank credit. And “Picture This” focuses on the high, and growing, cost of energy subsidies.

Highlights of the magazine

Asia Leading the WayBy Anoop SinghBased on expected trends, within five years Asia’s economy will be about 50 percent larger than it is today and be comparable in size to the economies of the United States and Europe.

A Stronger ChinaBy Linda YuehChina can emerge from the crisis stronger if it increases domestic demand and promotes global integration.

Min Zhu on Asia’s Economyand MoreThe new Special Advisor to the IMF Managing Director talks about Asia in the new world order, global economic issues, and the IMF’s relations with the region.

Principles for ReformBy William PooleIn designing new policies for the financial sector, old-fashioned ideas are important.

Debt and DemocracyBy Rabah Arezki and MarkusBrücknerDemocracies use windfalls from international commodity price booms to reduce external debt. Autocracies tend to spend them.

Municipal BombsBy Randall DoddLocal governments on both sides of the Atlantic found themselves in a financial mess after engaging in derivatives transactions.

Lowering Public DebtBy Harald Finger and Azim SadikovMany countries have slashed their public debt ratios in the past, often thanks to favorable macroeconomic conditions. They may be less lucky in the future.

Sovereign Wealth Funds in the New NormalBy Mohamed A. El-ErianAs the global financial crisis recedes, state-owned investment companies are well placed to seize a new set of opportunities andnavigate changing risks.

Searching for StabilityBy Bas B. Bakker and Anne-Marie GuldeEastern Europe rode a decade-long boom into a serious bust and now must figure out how to restart growth on a more even keel.

One Response

The trend is in favour of the growth of about 40%-50% for Asian nation. To sustain this growth, most of the big Asian Countries must give due importance to the inclusive growth. They must consider properly the growing gap between the Rich and the Poor. If this gap widens further then the growth may lead to social chaos over the long run.